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Snap reports 66% revenue growth

Snap reports 66% revenue growth
Snap reports 66% revenue growth
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Snap reports 66% revenue growth

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Snap reports 66% revenue growth

Revenues beat Wall Street forecasts

Snap shares reacted strongly to successful first-quarter results and high revenue growth forecasts of 80% to 85% in the second quarter, according to management expectations. Snap outperformed analysts' estimates in each of its key metrics.

Shares of Snap Inc. (SNAP) rose sharply on Friday, offsetting last week's decline, as investors praised its financial report positively.

For the first three quarters of this year, Snap reported a breakeven per share, while analysts' average estimates were pegged at a 6 per cent loss per share. Revenues rose 66 per cent from the same quarter in 2020 to $770 million, beating Wall Street expectations of $743.8 million. Snap maintained a high global active user unit (DAU) growth rate of 22 per cent to 280 million, compared to analysts' forecast of 275 million. The growth was mainly driven by international user additions, while North America and Europe saw increases of a modest 5% and 9% respectively.

Snap's forecast for the second quarter of 2021

Snap director Derek Andersen said that the company expects second quarter revenue growth in the range: 80% to 85%, which is a sharp increase after the 66% growth in the first quarter. However, it's worth considering that such sharp growth is a contrast to the second quarter of 2020, when Snap's revenue grew by only 17%, as many advertisers reduced or even suspended their advertising spend due to restrictions and economic uncertainty. However, Snap clearly sees significant momentum for advertisers, as its second-quarter revenue forecast of around $830m suggests steady sequential revenue growth for the company from $770m in the first quarter.

Snap is also targeting around 290 million DAU in the second quarter.

Snap shares have risen 22.4% since the start of 2021, up more than 280% in the past 12 months.

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